How In The World Does Venmo Make Money?

Every year, billions of dollars change hands in needlessly clumsy ways. Parents realize they’re short on cash and go out of their way to stop at an ATM so they can pay their babysitter; grandparents mail checks as birthday gifts, which take days to arrive and days to clear. Even as more and more of life is lived through a screen, paper is still how the vast majority of Americans give each other money.

In the past few years, a handful of tech companies have recognized these inefficiencies, introducing apps — such as Circle Pay, Square Cash, and Venmo — that let users transfer money to one another’s bank accounts using their phones, relatively frictionlessly. Among other things, they let users enter their bank-account information and then transfer money to others who have done the same. With Venmo, one of the more popular of these services, there is an additional wrinkle: Once money is transferred, the exchange shows up in the app’s social feed, a running record of who went out for drinks with whom, or whose roommate pays the electricity bill each month. (Users can elect to make a transfer private, but most don’t.) The app has among many — mostly young, city-dwelling people—attained a level of linguistic uptake reserved for the likes of Google and Uber: “Just Venmo me,” they say, after picking up a dinner bill.

The feature that sets Venmo apart is the social feed, which brings transparency to a class of transactions that used to be entirely private. The feed — an emoji-laden stream of often-indecipherable payment descriptions and inside jokes — seems frivolous; it is not a social-media destination in the way that Facebook or Twitter is. But as a public record, it is quite revealing of social dynamics — who’s hanging out with whom, and perhaps where. A friend of mine told me that Venmo proved invaluable in trying to determine if her ex and his new girlfriend were still dating.

RELATED: Why the Venmo Newsfeed Is the Best Social Network Nobody’s Talking About

The feature that sets Venmo apart is the social feed, which brings transparency to a class of transactions that used to be entirely private.
In other words, pointless and goofy as it seems, people do pay attention to what they see in Venmo’s feed. And there’s actually a way this parade of public transactions might give the app a significant advantage over its many competitors.

A ‘Master’ Fingerprint That Could Unlock Your Phone

Fingerprint readers, like the TouchID on an iPhone, exist to make your device extra secure while keeping the process of unlocking it easy. Computer scientists at New York University and Michigan State are poised to turn that security benefit on its head. Like a master key that can open any lock, these researchers developed digital “master prints” that could emulate a variety of partial fingerprints enough to hypothetically hack into a device.

The researchers wondered if there was a fingerprint equivalent to a common four-digit security code, like “1234.” Using analysis from a digital database, they discovered that, indeed, a master print could successfully mimic a random fingerprint 26 to 65 percent of the time, according to the study. Why such a huge range? It depends on the scale of the fingerprint database; the more partial fingerprints enrolled in a fingerprint sensor system, the greater the chances are that a master print could unlock it.

There are several security issues at play. One, fingerprint sensors on smartphones are usually small, and two, a user can enroll multiple fingers. What’s more, a phone usually gives you several attempts to unlock it with your print.

“The sensors are small and they don’t capture the full fingerprint,” says Nasir Memon, a computer scientist at NYU’s Tandon School of Engineering and one of the authors of the study.

And since a smartphone fingerprint sensor can be taught to recognize several different fingers, the system learns a lot of partial prints. When you place a finger on the sensor, the system doesn’t actually know which finger it is, or how you’re positioning it.

“So if any one of them match,” he says, “it will say ‘okay, that’s you.’”

Memon and his colleagues analyzed a digital database of 800 fingerprints, then extracted thousands of partial prints from that same database.They wondered: Are there any partial prints that match the others with a high probability? “We were surprised,” he says, “there were some that match like 15 percent of the time.”

It’s worthwhile to note that the experiment was computer-based, so the researchers did not try to actually trick phones using a master print. The findings are theoretical, and one prominent biometrics researcher is skeptical.